This paper utilizes a sample of 6,185 locally-issued, general obligation municipal bonds to examine the relationship between a city’s cumulative pension contributions and its cost of borrowing. Following the Great Recession unfunded public pension liabilities have soared to record highs, which, in theory, represent additional credit risks and may hinder local governments’ ability to service their outstanding debt. After controlling for bond characteristics, bond ratings, and issuer characteristics, the empirical analysis finds a statistically significant correlation between pension costs and borrowing costs, defined as the spread between the effective offering yield on municipal debt and the yield on a maturity-matched treasury on the municipal bond’s date of issuance. The results suggest that a 1% increase in cumulative city pension costs as a percent of city revenue is associated with an increase in yield spreads ranging from 1.2 to 3.5 basis points. These findings indicate that municipal bond investors do in fact consider pension expenses when pricing municipal bonds and suggest that addressing unfunded pension liabilities by mandating higher annual contributions will lead to higher borrowing costs for local governments.

Defined Benefit (DB) state pension trust funds are an integral component of state finances and play a major role in the country’s labor and capital markets. The last decade though has seen a substantial growth in unfunded pension obligations and a seeming inability by states to make the contributions needed to cover funding shortfalls. When coupled with even larger unfunded retirement health benefits, the looming threat of insolvent state retirement systems pose both current and long-term fiscal challenges to state governments already struggling with the ongoing economic downturn and billions of dollars in budget deficits. The convergence of these factors have led states to undertake various reform strategies in an attempt to move their respective public pension plans towards a more sustainable funding path. Using an asset-liability framework to describe the DB plan funding structure and process, this dissertation advances the discussion over major pension reform efforts currently implemented or considered by states. I show analytically the link between various pension reform categories and specific DB plan funding components, and how this in turn, affects DB plan funding outcomes. From this analytical framework, I derive the study’s hypotheses on the relationship between DB plan reform-linked funding components and outcomes of interest. This study looks at three DB-plan reform-linked funding components: (1) plan member employee contributions, (2) plan employer contributions, and (3) retirement benefit payments. Four major funding outcomes are evaluated: (1) the employer contribution rate, (2) flow funding ratio, and (3) stock funding ratio, and (4) relative size of plan unfunded liability. Utilizing a unique panel dataset of 100 DB state retirement systems from 50 states covering a nine-year period of FY 2002 to 2010, I empirically test the following hypothesized funding relationships: (1) States as DB plan sponsors have underfunded their plans as indicated by their failure to meet annual employer funding requirements; and (2) Increasing the employee and employer contribution rate and reducing the cost of retirement benefits are associated with higher plan stock funding ratios and lower unfunded pension liabilities. Results from my fixed-effects (FE) panel regression analyses provide the clearest empirical evidence to date that state DB pension plan sponsors underfunded their required annual employer contributions. The financial condition of a state’s budget is also shown to have a significant effect on the amount states are able to contribute into their pension funds. I find empirical support for the crucial function of employer contributions in determining the overall funded status of state pension plans. This finding is further reinforced when I estimate plan stock funding ratios using a dynamic system GMM (sGMM) panel regression model. The results from static FE and dynamic sGMM models suggest no significant effect on overall plan funding levels from changes in the employee contribution rate or the average retirement benefit cost. Lastly, the results lend evidence to the significant influence of past funding levels on current funding levels. It is recommended that future empirical research account for the dynamic nature of public pension funding and related endogeneity issues. This dissertation concludes by discussing the implications of the empirical findings for policy makers seeking to improve the funded status of their respective state DB retirement systems.

Ce travail de thèse a pour objectif de fournir un panorama aussi complet que possible de la pauvreté et des inégalités la retraite, en France et en Europe de la fin du vingtième siècle à aujourd'hui, mais également d'identifier le rôle de certaines politiques publiques dans la lutte contre la pauvreté et les inégalités. Compte tenu des contraintes économique et démographique pesant sur les systèmes de retraites, étudier les sources d'inégalités et de pauvreté, mais aussi les mécanismes efficaces en matière de lutte contre les inégalités et la pauvreté à la retraite, est actuellement pertinent de manière à anticiper au mieux les risques futurs. Pour ce faire, nous identifions les populations retraitées pauvres, ainsi que les facteurs d'inégalité et d'inéquité tout en définissant les concepts centraux que sont les inégalités et l'équité intragénérationnelles, intergénérationnelles, mais également ce qu'est la pauvreté des retraités dans les pays développés aujourd'hui. Nous proposons dans un premier temps un modèle d'équilibre général pour évaluer les impacts de chocs de politique économique, ainsi que les conséquences d'un choc démographique. Puis des analyses empiriques des inégalités et de la pauvreté sont proposées de manière à mettre en évidence le lien entre les systèmes fiscaux, de protection sociale, de redistribution d'une part, et les inégalités à la retraite d'autre part.Nous arrivons à la conclusion que les systèmes de retraite et l'architecture de la redistribution, en France et en Europe, ont permis de réduire les inégalités et la pauvreté à la retraite. Le niveau de vie moyen des ménages retraités apparaît désormais équivalent à celui des ménages actifs. Les réformes des systèmes de retraite en cours devront donc tenir compte non seulement de l'environnement démographique et économique dégradé (ralentissement de la croissance économique, augmentation du taux de chômage et des aléas de carrières, etc.) mais également du caractère efficient de l'architecture redistributive telle qu'elle existe aujourd'hui. / We provide a large picture of the inequalities and the poverty among the French and the European pensioners, from the late twentieth century to today. The public pension systems support strong economic and demographic constraints, which could involve a higher risk of poverty and/or risk of inequality during the retirement. We focus on the role of the public policies in reducing these inequalities. To do this, we identify the poor populations and shed light on the inequality and poverty factors. Through the chapters, we define the inequality, the poverty of the retirees in developed countries, the inter- and intergenerational inequalities. We put into perspective the efficient mechanisms to reduce the inequalities and the poverty among the pensioners. In the first chapter, we propose a general equilibrium model to explore the impact of parametric reforms and the impact of a demographic shock on the inequality level. Then, we address the question of the social protection impact on the poverty and the inequality level among the European retirees at the end of the last century. To finish, the last chapter focus on the relationship between the architecture of the redistribution in France, including the socialbenefits and taxes, and the inequalities. We distinguish in this last chapter the inequality level among pensioners and among workers from the inequalities between pensioners and workers. We conclude that the pension systems and the redistribution architecture, in France and in Europe, permitted to reduce the inequalities and the poverty among pensioners. The retirees' and the workers' households have now the same living standard. Our findings suggest that the future pension reforms should take into consideration the bad economic and demographic environments, but also the efficiency of the actual redistributive architecture.

This study examined the determinants of public pension fund performance through the lens of agency theory. The study sought to answer the following questions: (1) How much of the fluctuation in the performance of pension plans is due to political interference - either directly from decisions made by legislatures or through the governance structure of the pension boards, after controlling for asset allocation, plan size, and other external factors? (2) Do pension board expertise, education and training, and information disclosure requirements improve the performance of pension plans? (3) Do pension trustees strategically determine the actuarial rate of return (discount rate) in order to reduce contributions in times of fiscal stress for the pension sponsor? Using longitudinal data of pension fund performance over the period 2000 to 2009 and instrumental variables methods to address endogeneity issues, the study found partial support for the agency theory hypotheses. The results indicate that political interference through reduced contributions was the main factor explaining pension performance. There was no direct evidence about the negative impact of politically appointed trustees on pension performance. The impact of these findings for current policy and future research are discussed.

This study examined the determinants of public pension fund performance through the lens of agency theory. The study sought to answer the following questions: (1) How much of the fluctuation in the performance of pension plans is due to political interference - either directly from decisions made by legislatures or through the governance structure of the pension boards, after controlling for asset allocation, plan size, and other external factors? (2) Do pension board expertise, education and training, and information disclosure requirements improve the performance of pension plans? (3) Do pension trustees strategically determine the actuarial rate of return (discount rate) in order to reduce contributions in times of fiscal stress for the pension sponsor? Using longitudinal data of pension fund performance over the period 2000 to 2009 and instrumental variables methods to address endogeneity issues, the study found partial support for the agency theory hypotheses. The results indicate that political interference through reduced contributions was the main factor explaining pension performance. There was no direct evidence about the negative impact of politically appointed trustees on pension performance. The impact of these findings for current policy and future research are discussed.

In this dissertation, I develop theoretical models and an empirical study of the role of social interactions, the evolution of social norms, and their impact on individual behavior. Although my models are consistent with individual utility maximization, they generally emphasize social factors that channel individual decisions and/or shape individuals' preferences. I apply this approach to three different issues: labor supply, fertility decisions, and intergenerational transfers, generating predictions that are more consistent with observed empirical patterns of behavior than standard neoclassical approaches that assume independent preferences, perfect information, and efficient markets. In the first essay, I explain the long-run evolution of working hours during the 20th century in developed countries: the substantial decline for the first three quarters of the 20th century and the deceleration or even reversal of the fall in working hours in the last quarter. I develop a model of the determination of working hours and how this process is affected by both the conflict between employers and employees and the employees' desire to emulate the consumption standards of the rich reference group. The model also explores the effects of direct and indirect policies to limit hours advocated by political representations of workers such as trade unions or leftist parties. In the second essay, I study the coevolution of gender norms and fertility regimes. Since the 1990s, a new pattern of positive correlation between fertility rates and female labor force participation emerged in developed countries. This recent trend seems inconsistent with conventional economic approaches that explain fertility decline as a result of the increasing opportunity costs of childrearing, predicting a negative correlation between fertility and women's labor force participation. To address this puzzle, I develop a model of the evolution of gender norms and fertility in various economic environments influenced by the level of women's wages. Randomly matched spouses make choices related to fertility - labor supply and the division of household labor - based on their preferences shaped by gender norms. In the model, norm updating is influenced by both within-family payoffs and conformism payoffs from social interactions among the same sex. The model shows how changes in economic environments and the degree of conformism toward norms can alter fertility outcomes. The results suggest that the asymmetric evolution of gender norms between men and women could contribute to very low fertility, explaining the positive correlation between fertility and women's labor force participation. Finally, I estimate the effect of exogenously introduced public pensions for the elderly on the amount of private transfers they receive. There has been a long debate whether public transfers crowd out private transfers. Previous empirical studies on this issue suffer from the endogeneity of income that contaminates estimates. I use an exogenously introduced public transfer, the Basic Old Age Pension in Korea, to test the crowding out hypothesis. A considerable proportion of the elderly population, especially women living without a spouse, do not experience the crowding out effect and moreover, among those who do, the size of the effect is relatively small. The results support the redistribution effect of the Basic Old Age Pension targeting the poor elderly in Korea.

Unfunded public pension and Other Post Employment Benefits (OPEB) liabilities impose major threats to local fiscal sustainability, which increases governments' default risk and crowds out funding for essential local services. To close the funding gaps, localities may apply a wide range of fiscal instruments, including increasing taxes, fees, and user charges, issuing debt and bonds, obtaining grants and/or decreasing expenditures. This research compares the US local fiscal choice behavior in the context of the fiscal federalism framework. The goal is to identify the ideal mix of constitutional fiscal rules to preserve local fiscal sustainability. Not only should the rules aim to minimize local adverse fiscal behavior pre-crisis, which may include excessive spending, large accumulations of unfunded liabilities, and over-reliance on external grants, but also allow strong local fiscal adaptive capacity post-crisis. The findings help localities identify any effective and prudent fiscal options available to close their pension funding gaps and contribute to the overall sub-national fiscal institutional reforms. Theoretically, this research introduces a novel analytical framework pertaining to local fiscal sustainability by separating pre-crisis and post-crisis institutional analysis and by consolidating two historically viewed as two competing paradigms, public choice and public finance. I argue that the two approaches are complementary rather than contradictory since public choice theory sets up an institutional prerequisite for normative outcomes to be realized and prevents the occurrence of extreme circumstances. The ideal mix of formal fiscal rules, thus, should induce the balanced budget rule that applies to all budget items, stringent spending and debt limits, and institutionalized local tax authority and stable tax structure, but not tax limits. Tax limits are less effective in constraining government than spending and debt limits due to fiscal gimmicks. Moreover, stringent tax limits could significantly limit local governments' ability to bounce back on their own. This research also found that cities do apply different fiscal strategies to reduce exogenous shocks, given their unique fiscal institutions in place. Furthermore, cities with fewer institutional constraints exhibit a faster speed of adjustment. However, certain institutional variables, such as public union size and tax authority, might not have the same fiscal implications as predicted by the theory. Cities often manage to cut their short-term spending regardless of the size of their public unions. A broad range of tax authority does not imply greater local revenue-generating capacity. Own source revenue autonomy might be a better indicator of local fiscal adaptive capacity. / Doctor of Philosophy / Unfunded public pension and Other Post Employment Benefits (OPEB) liabilities impose major threats to local fiscal sustainability, which increases governments’ default risk and crowds out funding for essential local services. To close the funding gaps, localities may apply a wide range of fiscal instruments, including increasing taxes, fees, and user charges, issuing debt and bonds, obtaining grants and/or decreasing expenditures. This research compares the US local fiscal choice behavior in the context of the fiscal federalism framework. The goal is to identify the ideal mix of constitutional fiscal rules to preserve local fiscal sustainability. Not only should the rules aim to minimize local adverse fiscal behavior pre-crisis, which may include excessive spending, large accumulations of unfunded liabilities, and over-reliance on external grants, but also allow strong local fiscal adaptive capacity post-crisis. The findings help localities identify any effective and prudent fiscal options available to close their pension funding gaps and contribute to the overall sub-national fiscal institutional reforms. Theoretically, this research introduces a novel analytical framework pertaining to local fiscal sustainability by separating pre-crisis and post-crisis institutional analysis and by consolidating two historically viewed as two competing paradigms, public choice and public finance. I argue that the two approaches are complementary rather than contradictory since public choice theory sets up an institutional prerequisite for normative outcomes to be realized and prevents the occurrence of extreme circumstances. The ideal mix of formal fiscal rules, thus, should induce the balanced budget rule that applies to all budget items, stringent spending and debt limits, and institutionalized local tax authority and stable tax structure, but not tax limits. Tax limits are less effective in constraining government than spending and debt limits due to fiscal gimmicks. Moreover, stringent tax limits could significantly limit local governments’ ability to bounce back on their own. This research also found that cities do apply different fiscal strategies to reduce exogenous shocks, given their unique fiscal institutions in place. Furthermore, cities with fewer institutional constraints exhibit a faster speed of adjustment. However, certain institutional variables, such as public union size and tax authority, might not have the same fiscal implications as predicted by the theory. Cities often manage to cut their short-term spending regardless of the size of their public unions. A broad range of tax authority does not imply greater local revenue-generating capacity. Own source revenue autonomy might be a better indicator of local fiscal adaptive capacity.

This report provides an extensive overview of the history of the Swedish pension system. Starting with the implementation of the world's first universal public pension system in 1913, the report discusses the political as well as the economic background to each major public pension reform up until today. It presents the rules and the institutional details of these reforms and discuss their implications for retirement behavior, the general state of the economy and the political environment. Parallel to the development of the public pension system, a comprehensive and quite complex occupational pension system has emerged. This report describes the historical background and the institutional details of the four largest agreement-based occupational pension schemes in Sweden.

Die vorliegende Arbeit besteht aus vier Aufsätzen zum Thema Besteuerung, welche sich in drei Themenblöcke unterteilen lassen: Die ersten beiden Aufsätze dieser Arbeit (Maiterth/Chirvi 2015 sowie Chirvi 2019) widmen sich dem deutschen Ehegattensplitting, der dritte Beitrag (Chirvi/Maiterth 2019) behandelt die Besteuerung gesetzlicher Renten in Deutschland und der vierte Aufsatz (Chirvi/Schneider 2019) untersucht Präferenzen bzgl. der Besteuerung von Vermögen in den USA. Eine Aufteilung anhand der behandelten Steuerarten macht die Arbeit noch übersichtlicher: So behandeln die ersten drei Aufsätze jeweils Aspekte der Einkommensteuer, während sich der vierte Beitrag verschiedenen Arten der Vermögensbesteuerung widmet. Es lässt sich ergänzen, dass die Aufsätze zur Einkommensteuer sehr eng mit dem deutschen Steuerrecht verbunden sind. Sie beschäftigen sich mit existierenden Regelungen (§ 26 sowie 32a EStG zum Ehegattensplitting bzw. § 10 sowie 22 EStG zur Rentenbesteuerung) und deren Auswirkungen. Dies gilt insbesondere für die Beiträge Maiterth/Chirvi (2015), in dem ein Forschungs- und Rechtsprechungsüberblick zum Thema Ehegattensplitting geliefert wird, sowie Chirvi/Maiterth (2019), in dem eine potentielle Doppel- oder Minderbesteuerung gesetzlicher Renten durch das AltEinkG untersucht wird. Der Aufsatz Chirvi (2019) untersucht Arbeitsangebotswirkungen des Ehegattensplittings und ist daher etwas weniger eng mit dem deutschen Recht verknüpft, da sich zumindest ähnliche Regelungen auch in anderen Ländern finden. Der Beitrag zur Vermögensbesteuerung, Chirvi/Schneider (2019), untersucht dagegen Präferenzen in Bezug auf – bis auf die Nachlasssteuer („estate tax“) – nicht existierende Vermögensteuern in den USA. Zwei der Aufsätze wurden in der Zeitschrift Steuer und Wirtschaft publiziert, die anderen beiden wurden in der arqus Working-Paper-Reihe veröffentlicht. / This dissertation consists of four papers on taxation that can be divided into three different subject areas: The first and the second paper (Maiterth/Chirvi 2015 as well as Chirvi 2019) deal with the ‘income splitting’, i.e. the taxation of married couples in Germany. The third paper (Chirvi/Maiterth 2019) analyzes effects of a reform regarding the transition to downstream taxation of public pensions. Finally, the last paper (Chirvi/Schneider 2019) examines preferences for the taxation of wealth in the United States. While the first three papers analyze (the effects of) specific regulations within the German income tax code (income splitting in Art. 26 and 32a of the German income tax code; the taxation of public pensions in Art. 10 and 22 of German income tax code), the fourth essay is about partially hypothetical types of capital taxation. Maiterth/Chirvi (2015) review the literature on the topic in the areas of public economics, business taxation and tax law and compile arguments for and against the income splitting. As many researchers point out that the income splitting may lead to disincentives for married women to work, Chirvi (2019) empirically analyzes its labor supply effects based on a new approach. Chirvi/Maiterth (2019) evaluate whether the AltEinkG, a reform that lead to a successive transition to downstream taxation, results in under- or double taxation of public pensions in Germany. They develop a measure and subsequently estimate potential under- or double taxation based on official income tax data. Chirvi/Schneider (2019) are interested in preferences regarding capital taxation and conduct a survey-experiment on mTurk to reveal whether preferences depend on the type of tax and/or attributes of assets and personal characteristics. Two of these papers have already been published in the scientific journal Steuer und Wirtschaft, the others can be found in the arqus working-paper series.